The official blog of Illinois Issues magazine,
published by the Center for State Policy and Leadership
at the University of Illinois Springfield

Friday, January 22, 2010

Public universities struggle to make payroll

By Jamey Dunn

Public universities in Illinois are considering different options to cope with the fact that the state owes them millions, and there is little sign of a light at the end of the tunnel.

The University of Illinois is considering a tuition increase, and Southern Illinois University is looking to borrow. In the meantime, smaller state universities are trying to find cost savings anywhere they can.

University of Illinois Interim President Stanley Ikenberry created a stir when he said at a board of trustees meeting in Chicago yesterday that a 9 percent tuition increase may be a best-case-scenario for the university system. Ikenberry said a decision about a possible tuition increase probably would not come until the summer. U of I has campuses in Urbana, Chicago and Springfield. The board also voted to increase student fees from $1,382 a semester to $1,421.

The U of I has already laid off some staff and instituted a hiring freeze and furlough days, unpaid days off that result in a salary cut for employees, as part of a plan to cut $82 million from its budget. The state owes the U of I more than $400 million. “Furloughs are the very painful and highly visible last resort,” university spokesman Thomas Hardy said. The U of I has created a task force to look for ways to save money in everyday operations.

Other cost reduction measures that state universities are taking include deferring maintenance projects, cutting department budgets and freezing their buying power for large purchases, cutting travel costs and slowing down payments to vendors. Those decisions impact surrounding communities as well as campuses.

David Gross, a spokesman for Southern Illinois University, said slowing down SIU’s payments to vendors has negative affects on local business in already economically depressed areas of southern Illinois. SIU has campuses in Carbondale and Edwardsville. He said the uncertain fiscal environment -- the state owes SIU $125 million -- is damaging university morale. “There has been a lot of angst on campus.”

Hardy said cutting down on maintenance led to the U of I laying off some maintenance employees as projects for them to work on dwindled.

While the U of I is considering a tuition increase, Gross said that it might not be a viable option for SIU. “We think we are at the end of our ability to raise tuition rates much, if any at all.” SIU has not instituted any layoffs or furlough days, and Gross said the university has no plan to at this point. SIU has given its existing budgeting committees the task of seeking out savings.

SIU is considering asking the legislature for borrowing power in case it gets in a tight spot and cannot meet payroll. Universities do not currently have the power to borrow money for their operating budgets. The U of I is not seeking the ability to borrow.

Illinois State University, located in Normal, has not had to face furloughs or layoffs yet. University spokesperson Jay Groves said that ISU would likely not make any decisions about a tuition increase until May. The state owes that university more than $60 million.

Western Illinois University, with campuses in Macomb and the Quad Cities, is taking a hard look at everyday efficiencies. CORRECTION The state owes Western $21.6 million. Spokeswoman Darcie Shinberger said that the university is doing all it can to avoid layoffs. “We are stressing that whether it’s $5 or $25, really take a hard look.”

Shinberger said a tuition increase could be in the works, but that decision will not be made until June. “It is likely we will be looking at a modest all-costs increase.”

Eastern Illinois University also has not instituted layoffs. It is implementing a hiring freeze, putting off maintenance projects and reducing spending to try to keep it that way. The state owes the university $39 million.

Representatives from all universities contacted agree that cost-cutting measures and dwindling funding for higher education are not new issues. However, the state’s inability to pay its bills has made the current situation much more dire. Finding the money to pay faculty and staff is a serious concern across the board.

“This is a bigger example, or a more critical example, of what’s been going on for several years with the sluggish economy and lack of funding to higher education,” Groves said

Judy Erwin, executive director of the State Board of Higher Education, said Illinois’ economic woes are all the more reason for the state to invest in education to train a competitive workforce. “Unless the state steps up to the commitment to fund higher education, Illinois will not be able to rebuild the state’s economy.”

Irwin said she doesn’t understand why legislators have not done more to get institutions of higher education the money they are owed. “What is it going to take to convince legislators that there is a very serious crisis that cannot be ignored…Do we wait until some colleges have to be shut down?”

Representatives of Northeastern Illinois University, Governor’s State University and Northern Illinois University could not be reached for comment.

About Me

The bureau follows state government from the Capitol Press Room and writes articles for Illinois Issues magazine, published by the Center for State Policy and Leadership at the University of Illinois at Springfield.
Contact: illinois.issues@gmail.com